Sanofi Enters Negotiations to Sell Stake in Consumer Healthcare Unit

Investing.com – Sanofi (EPA:SASY)(NASDAQ:SNY) has entered into exclusive negotiations with private equity firm Clayton, Dubilier & Rice (CD&R) to sell a controlling stake in its consumer healthcare unit, Opella.

This move marks a strategic shift for Sanofi, which aims to concentrate on developing innovative medicines and vaccines.

Proposed Deal Details

Under the proposed deal, CD&R would acquire a 50% controlling interest in Opella, while Sanofi retains a significant stake, allowing it to remain a key player in Opella's future trajectory.

Opella, based in France, is a global leader in the consumer healthcare market, featuring well-known brands such as Allegra, Doliprane, and Dulcolax, which serve over 500 million consumers worldwide. Opella ranks as the third-largest company in the over-the-counter and vitamins, minerals, and supplements sectors.

The valuation of Opella is based on an enterprise value of approximately €16 billion, equating to around 14 times its projected EBITDA for 2024.

CD&R's offer is both binding and fully financed. By retaining involvement with Opella, Sanofi expects to benefit from the ongoing value creation within the business.

Regulatory Approvals and Closing

The deal is subject to final agreements and regulatory approvals and is expected to close no earlier than the second quarter of 2025.

Sanofi’s decision aligns with its objective of becoming a more streamlined biopharma company focused on addressing significant health issues like RSV, COPD, and multiple sclerosis.

Implications for Opella

This transaction will allow Opella to strengthen its position as a standalone consumer healthcare company, leveraging CD&R's expertise in fostering growth and innovation in consumer-focused companies. Additionally, the deal involves participation from Bpifrance, a French investment bank, which is set to acquire a minority stake of around 2%.

As a result of the transaction, Opella will be classified as discontinued operations in Sanofi's financial statements. From the fourth quarter of 2024, the profit and loss from Opella will be reported separately, prompting adjustments to Sanofi’s earnings per share guidance.

The financial impact of Opella’s reclassification will also be reflected in Sanofi’s third-quarter earnings results for 2024.